The manager of Mapletree North Asia Commercial Trust (MNACT) has reported distribution per unit (DPU) of 2.876 cents for the 1HFY2020/2021, a 26% drop from DPU of 3.887 cents reported a year ago.
Gross revenue for the half-year period fell 9.6% y-o-y to $190.1 million mainly due to the rental reliefs granted to tenants at Festival Walk, which amounted to some $34.9 million.
The decline was partially offset by the half-year contributions from the acquisitions of MBP and Omori in February 2020 and the higher average rates of the HKD, JPY and RMB against the SGD.
Property operating expenses for 1HFY2020/2021 rose 24% y-o-y to $50.4 million due to expenses of MBP and Omori which were acquired in February 2020 and the higher average rates.
Net property income (NPI) for the period dropped 17.7% y-o-y to $30.1 million.
“Comparing 2QFY2020/2021 and 1QFY2020/2021 (ie. the quarter ended 30 June 2020), the NPI for 2Q FY20/21 improved by 4.0%. This was mainly attributable to higher turnover rental revenue, and lower rental reliefs granted to Festival Walk’s retail tenants,” says Cindy Chow, CEO of the manager.
“There was also higher average occupancy at Gateway Plaza and improved average occupancy at MON and MBP. Notwithstanding the improvement seen in 2QFY2020/2021, there remains significant uncertainty on when the Covid-19 situation might ease, especially with the onset of winter, and when a more sustained recovery across the various markets that MNACT operates in, will occur,” Chow adds.
In 1HFY2020/2021, MNACT received interim payments of $36.8 million from the insurers on account of the estimated insurance claims for property damage and revenue loss due to business interruption at Festival Walk.
“For Festival Walk, our retail tenants continue to navigate through a volatile and weak retail environment, impacted by the social distancing measures which were tightened from July 29 following a resurgence of infections in Hong Kong SAR,” notes Chow.
“With the COVID-19 situation showing some improvement in recent weeks, we have observed a gradual increase in shopper traffic and tenant sales at Festival Walk. We will continue to focus on maintaining a high occupancy rate at Festival Walk which stood at 99.0% at the end of September 2020, while exploring more initiatives to boost sales and traffic,” she adds.
The proceeds are considered as non-distributable income, and are recorded as non-operating income in the financial statements.
Portfolio occupancy as at Sept 30 stood at 96% with a weighted average lease expiry (WALE) of 2.5 years by GRI.
Cash and cash equivalents as at Sept 30 stood at $251.2 million.
“In view of the COVID-19 situation and market volatilities, MNACT’s performance in FY20/21 is expected to be lower than that in FY19/20. We will continue to drive operational efficiency through reducing operating expenses and non-essential capital expenditure. At the same time, acquisition opportunities will be actively sought to further diversify the portfolio and expand MNACT’s income stream,” she concludes.
Units in MNACT closed 2 cents lower or 2.2% down at 88.5 cents on Oct 29, prior to this announcement.
